Baroness Goldie: My Lords, I thank the noble and gallant Lord for his observations and questions. I think they go to the heart of all of this, which is money, which the noble and gallant Lord specifically inquired about. The Defence Secretary has been very clear that we will live within our means and our means at the moment is 2% of GDP. But I remind your Lordships that we will have a budget of over £50 billion this year. By any comparison with what is available to other departments, that is a very hefty allocation of funding. The Defence Secretary was clear in the other place that he would like to see 2.5%; the Prime Minister has committed to that when fiscal and economic circumstances allow. That would be a very useful target to bear in mind. So this is costed within the resource we know we have.
The noble and gallant Lord made an important point about procurement. We have brought in important improvements, and of course the paper itself outlines what our new alliance with industry will be and what acquisition reform will constitute. I will not rehearse all that, but I was very struck by something that the Secretary of State said in the other place yesterday. He said:
“In 2009-10, the average time delay on a project was 28%; it is now 15%. The average cost overrun was 15% on a project in 2009-10; it is now 4%”.—[Official Report, Commons, 18/7/23; col. 792.]
We have been striving to bring in significant reforms. We have the defence equipment and supply directorate; it is staffed with people who have both commercial and MoD experience. Noble Lords will see the proposal in the paper that we move on to five-year contract periods; I think that is a useful discipline. Obviously, some of the big contracts will be extraordinary and beyond that, but I think that is a useful working template.
The other important point that the Secretary of State made in the other place was that we have found out, particularly from the conflict in Ukraine, that whereas we used to want to look at, examine and procure the perfect, even if it took 10 years to get it, it makes far more sense now to look around and see whether there is something you can get off the shelf. You can buy it more cheaply, get it now and then adapt it. An interesting illustration of that is our ocean surveillance ship, RFA “Proteus”, which we bought off the shelf and have adapted ourselves. It will shortly be ready for operational activity. So I think some important lessons have been learned.
I also picked up something that I am going to commit to memory, which the Secretary of State said. He said, in defence procurement,
“never defer—either delete or deliver”.—[Official Report, Commons, 18/7/23; col. 792]
I absolutely sympathise with that.
I think that what the noble and gallant Lord has been familiar with, and indeed was referring to, is some of these, frankly, disastrous procurement experiences where we have placed an order and changed our minds, and the industry partner has changed its mind. We have changed the spec and altered the price, and the whole thing has become like a fast-moving vehicle with no steering wheel and nobody trying to direct it. The reforms we have brought in, and particularly what is outlined in the paper, are going to be a very robust regulator of how we approach procurement in the future.